Importance of language for Chinese vs. Indian Internet startups

I was talking to a friend based in Mumbai today. He works as a product manager at a fairly large Internet company (large by Indian standards).

Mumbai has been the center of endless controversy about “local” language usage and its seems to be civil xenophobia bordering unrest.

The short of it is that India has a national language – Hindi. Its mostly spoken in the north of India. Each state pretty much speaks its own language and are close to 15 major and hundreds of minor languages. There’s a little bit of the Lexus and the Olive tree in most states. Southern states like Tamil Nadu & others staunchly prefer their own regional language and pretty much ignore or refuse to acknowledge any Hindi. So, the default becomes English, which is spoken by many of the literate. Many Indians that migrate to other states from their home state dont quite learn the local language & customs at all – which is the big beef of the “locals”. There’s a fear among the locals that their traditions, customs and values (and most importantly their language) will get overwhelmed by English.

My friend lamented that most Indian Internet startups have very little “local knowledge & language” advantage because we are so heterogenous. The top Internet properties in India by # users are mostly global, since the “literate” Indians know English. That’s served us well in the backoffice outsourcing, but unlike China where Sina, Alibaba and QQ dominate the web thanks to their largely Chinese language content.

What is local knowledge (besides language) and how can startups in India use it to their differentiated advantage? Here are some examples of successful, and I would love some more examples outside of India (maybe Europe) to help understand this.

1. Shaadi leveraged the knowledge that Indian parents tend to have significant leverage on their kids marriage and launched Shaadipoint to help parents look for prospective brides and grooms for their kids. This is different from the 10000+ dating and match.com variants in the US and other places.

2. A local Indian real estate 2.0 startup leverages their knowledge of local districts and suburbs to build a manual / automated database of real estate properties.

My bigger question is: What’s the future hold for the largely speaking English Indians vs. the largely Chinese speaking China? Is it important that we teach our kids local language and customs to preserve them or look to integrate in the global economy. I know the easy answer is do a bit of both, but its not practical.